INTERNAL AUDIT REPORT 
LIMITED CONTRACT COMPLIANCE 
CMC INVESTMENTS, INC. DBA DOLLAR RENT-A-CAR 

JUNE 2014 – MAY 2017 

ISSUE DATE: MAY 30, 2018 
REPORT NO. 2018-04

          CMC Investments, Inc.                                                                         INTERNAL AUDIT 
d/b/a Dollar Rent A Car 
June 01, 2014 – May 31, 2017 
TABLE OF CONTENTS 

EXECUTIVE SUMMARY .......................................................................................................................................... 3 
BACKGROUND ....................................................................................................................................................... 4 
AUDIT SCOPE AND METHODOLOGY ...................................................................................................................... 5 
SCHEDULE OF FINDINGS AND RECOMMENDATIONS .......................................................................................... 6 
APPENDIX A: RISK RATINGS.................................................................................................................................. 8 














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          CMC Investments, Inc.                                                                         INTERNAL AUDIT 
d/b/a Dollar Rent A Car 
June 01, 2014 – May 31, 2017 
EXECUTIVE SUMMARY 
Internal Audit (IA) completed a rental car concession agreement audit of CMC Investments, Inc. d/b/a
Dollar Rent A Car, Inc. (Concessionaire), for the period June 1, 2014 through May 31, 2017. The audit
objective was to determine whether the Concessionaire complied with significant financial provisions of
the concession agreement, including whether reported gross revenues and the Customer Facility
Charges (CFC) paid to the Port were complete and reasonable. 
We concluded that the Percentage Fees paid to the Port materially complied with the terms of the Rental
Car Lease and Concession Agreement. However, we determined that the Concessionaire underreported
certain gross revenue items and over-reported the CFC: 
1)  The Concessionaire did not report $343,326 in incidental gross revenues to the Port, resulting in
$34,333 in Percentage Fees owed to the Port. 
2)  The CFC was over-reported to the Port, by $19,596 for the audit period. This was primarily due to a
mistake by Concessionaire in November 2015, which resulted in an overpayment of that month’s
CFC to the Port. 
These two items resulted in an underpayment to the Port of approximately $14,737 for the three-year 
period ended May 31, 2017. Th ese issues are discussed in more detail beginning on page six of this
report. 
We extend our appreciation to management and staff of the Aviation Commercial Management
Department, the Concessionaire, and the Accounting and Financial Reporting Department for their
assistance and cooperation during the audit. 



Glenn Fernandes, CPA 
Director, Internal Audit 

RESPONSIBLE MANAGEMENT TEAM 
Lance Lyttle, Managing Director Aviation 
Jim Schone, Director AV Commercial Management 
James Jennings, Sr. Manager, AV Properties Group 



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          CMC Investments, Inc.                                                                         INTERNAL AUDIT 
d/b/a Dollar Rent A Car 
June 01, 2014 – May 31, 2017 

BACKGROUND 

CMC Investments, Inc. is a private company categorized under Automobile Renting and Leasing, in 
Mercer Island, WA. The company was established in 1987, and operates under the name Dollar-Rent-A
Car at Seattle Tacoma International Airport and Portland International Airport. 
The terms of the agreement provide for a Minimum Annual Guarantee (MAG) of the higher of: (1) 85% of
the total amount paid to the Port in the previous agreement year, or (2) the Initial MAG bid by the
Concessionaire of $1,333,399. Additionally, the agreement requires a Percentage Fee equal to 10% of
Concessionaire’s gross revenues, provided the fee is higher than the monthly MAG. 
The MAG is payable in advance, on or before the first day of each month, without notice from the Port.
The Percentage Fee, if applicable, is due on or before the 20th of the following month.
The agreement states that the Concessionaire must collect a Customer Facility Charge (CFC) of $6 per
rental day. 
The table below reflects total gross revenue, concession fees, and CFC fees: 
REPORTED GROSS REVENUE AND CONCESSION CALCULATION     CUSTOMER
FACILITY CHARGE 
AGREEMENT     REPORTED GROSS
CONCESSION FEES   REPORTED CFC FEES 
YEAR             REVENUES 
2014 - 2015                  $16,093,271            $1,609,327            $1,943,754 
2015 - 2016                   16,071,679            1,607,168            2,042,244
2016 - 2017                   16,555,626             1,655,563             2,207,856 
TOTAL                  $48,720,576         $4,872,058         $6,193,854
Data Source: PeopleSoft Financials and Propworks 








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          CMC Investments, Inc.                                                                         INTERNAL AUDIT 
d/b/a Dollar Rent A Car 
June 01, 2014 – May 31, 2017 

AUDIT SCOPE AND METHODOLOGY 

We conducted this audit in accordance with Generally Accepted Government Auditing Standards and the
International Standards for the Professional Practice of Internal Auditing. Those standards require that
we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives. 
The period audited was June 1, 2014 – May 31, 2017. After identifying significant provisions in the
Agreement, we performed the following audit procedures: 
Insurance & Security Deposit 
• Identified the insurance requirements in the agreement. 
• Verified the insurance certificates, as required in the agreement, were provided to the Port for
the audit period. 
• Tested three years of insurance coverage and endorsements as required. 
• Identified the Security requirement in the agreement. 
• Verified and tested three years of Security amounts as required 
Customer Facility Charge (CFC) 
• Calculated a number of transaction (i.e., rental) days and CFC from the Concessionaire’s
system reports. 
• Reconciled the reported amount to those certified by Concessionaire’s Controller. 
• Reconciled the calculated numbers to what the Concessionaire reported for the audit period. 
• Tested a risk-based sample of 113 closed rental agreements to determine whether the CFC
calculation was based on the correct checkout and return date, and was accurate. 
Revenue completeness and reasonableness 
• Reviewed the Concessionaire’s chart of accounts, to determine whether unusual revenue
accounts were included in the determination of Gross Revenue reported to the Port. 
• Reconciled the reported revenues to: 
o   The Daily Business Report (DBR) GL by revenue item. Additionally, the revenue items
were reviewed to determine whether all items subject to the Percentage Fee were
included in the reported Gross Revenue. 
o   The Certified Audit Statement of Gross Revenues, independently verified by a CPA. 
• Tested a risk-based sample of 16 closed rental agreements in the audit period to determine
whether: 
o All revenue items on the face of the rental agreement agreed to the amount posted to the
DBR. 
o Disallowed commercial discounts/rebates reduced reported Gross Revenues. 
• Analyzed Port records to determine whether payments were received in a timely manner and
were complete. 


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          CMC Investments, Inc.                                                                         INTERNAL AUDIT 
d/b/a Dollar Rent A Car 
June 01, 2014 – May 31, 2017 
SCHEDULE OF FINDINGS AND RECOMMENDATIONS 
1) RATING: MEDIUM 
The Concessionaire did not report $343,326 in incidental Gross Revenues to the Port, resulting in
$34,333 in Percentage Fees owed to the Port.
This is a repeat finding from a previous audit, which the Concessionaire acknowledges and has agreed to
incorporate into their monthly gross revenue reporting to the Port. The amounts cited in the table below
summarize the underreported gross revenues. 
Year-Ended      Reported Gross         Audited         Under
May 31            Revenue          Gross Revenue     Reported 
2015              16,093,271        16,196,832    $ 103,561 
2016              16,071,679       16,184,932     113,253
2017              16,555,626        16,682,138     126,512 
Concession Revenue Underreported     343,326
Concession Fees Underpaid      $34,333 
Data Source: CMC Investments’ DBR records, PROPworks & PeopleSoft Financials 
Our analysis of the Concessionaire’s financial records and ensuing detail transaction testing, determined
that Gross Revenues from the following account line items were not reported to the Port: 
• Admin. Fees                                 • Lost/Found Handling Fees 
• Pickup Fees                                  • Cleaning Fees 
• Roadside Services Fees                         • Lost Key Charges 
Recommendations: 
1. Seek and recover approximately $34,333 in underpaid Percentage Fees. 
2. Assess the applicability of the one-time late charge and any accrued interest. 
3. Communicate with the Concessionaire to assure Gross Revenues are accurately reported and that the
associated Percentage Fees are collected.
Management Response/Action Plan 
Aviation Commercial Management will seek to recover the underpaid Percentage Fees, together with any
applicable late fees and interest charges. Aviation Commercial Management will also communicate both
verbally and in writing that the revenues identified above, are not permitted exclusions from revenue
according to the Agreement. Therefore, effectively immediately, those revenue items are required to be
included in their monthly reports of gross revenues provided to the Port. 
Lastly, Aviation Commercial Management will advise Accounting and Financial Reporting that the
Minimum Annual Guarantee under the Lease for the 2017-2018 Agreement Year should be increased to
$1,417,981.73 to account for these under-reported Gross Revenues in the 2016-2017 Agreement Year. 
DUE DATE: 9/30/2018 

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          CMC Investments, Inc.                                                                         INTERNAL AUDIT 
d/b/a Dollar Rent A Car 
June 01, 2014 – May 31, 2017 

2) RATING: MEDIUM 
The CFC was over-reported to the Port, by approximately $19,596 for the audit period. This was primarily
due to a mistake by the Concessionaire in November 2015, which resulted in an overpayment of that
month’s CFC to the Port. 
When we reviewed monthly transaction totals against CFC payment history, we also determined that the
Concessionaire inconsistently collected the CFC from customers in other months. 
The lease agreement under Section 6.2.1 stipulates: 
“Concessionaire shall collect a daily CFC on all vehicle rental transactions originating at the Consolidated
Rental Car Facility… Each Concessionaire must collect the CFC at the time of the first payment is made
under a Rental Car Contract, and must remit the full amount of the CFC to the Port regardless of whether
or not the full amount of such CFC is actually collected by the Concessionaire from the person who
rented the Automobile under such Rental Car Contract.” 
The Concessionaire acknowledged the amounts cited in the table below, which summarizes the overreported
CFC. Additionally, the Concessionaire developed enhancements to their internal controls to
prevent their sales representatives from modifying the CFC.
Year-Ended                                            Under
Audited CFC         Reported CFC 
May 31                                               Reported 
2015              $1,944,336       $1,943,754         $ 582 
2016               2,020,482       2,042,244      (21,762)
2017               2,209,440        2,207,856         1,584 
Total Due to the Concessionaire.     $ (19,596)
Data Source: CMC Investments’ Rental Agreement report & PeopleSoft Financials 
Recommendations 
1. Refund the Concessionaire $19,596 for the CFC overpayment. 
Management Response/Action Plan 
Aviation Commercial Management will refund the overpaid CFC’s. 

DUE DATE: 9/30/2018 





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          CMC Investments, Inc.                                                                         INTERNAL AUDIT 
d/b/a Dollar Rent A Car 
June 01, 2014 – May 31, 2017 

APPENDIX A: RISK RATINGS 
Findings identified during the course of the audit are assigned a risk rating, as outlined in the table below.
The risk rating is based on the financial, operational, compliance or reputational impact the issue identified
has on the Port.  Items deemed “Low Risk” will be considered “Exit Items” and will not be brought to the
final report. 
Port
Rating        Financial        Internal Controls       Compliance          Public         Commission/
Management 
Large financial                                                        High
Noncompliance
impact                                                    probability for       Important 
Missing, or         with applicable
external audit
inadequate key     Federal, State, and
HIGH        Remiss in                                          issues and/or      Requires
internal controls      Local Laws, or Port
responsibilities of                                                        negative           immediate
Policies 
being a custodian                                                  public            attention 
of public trust                                                          perception 
Partial controls 
Potential for         Relatively
Inconsistent
external audit        important 
Not adequate to      compliance with
Moderate                                            issues and/or
MEDIUM                       identify       Federal, State, and
financial impact                                                       negative        May or may not
noncompliance or    Local Laws, or Port
public       require immediate
misappropriation          Policies 
perception          attention 
timely 
Internal controls in                                  Low
place but not                             probability for
Generally complies
consistently efficient                            external audit    Lower significance 
with Federal, State
Low financial          or effective                               issues and/or
LOW/                                      and Local Laws or
impact                                                       negative       May not require
Exit Items                                             Port Policies, but
Implementing/enhan                          public          immediate
some minor
cing controls could                            perception          attention 
discrepancies exist 
prevent future
problems 








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